Johnson Lifts Secures ₹1.24 Crore Relief As CESTAT Chennai Upholds Elevator Parts Classification

The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that lift and elevator parts imported by Johnson Lifts Pvt. Ltd. were correctly classifiable as “parts suitable for use solely or principally with lifts and escalators” under Customs Tariff Heading (CTH) 8431, which attracts a lower rate of customs duty.

A Bench comprising Judicial Member Ajayan T.V. and Technical Member Ajit Kumar set aside the department's differential customs duty demand exceeding Rs. 1.24 crore, along with interest and penalties, while upholding the separate classification of door locks.

The dispute arose from a show cause notice issued by the Customs Department alleging that the appellant had wrongly classified various imported items—including steel angles, belts, bolts and nuts, brushes, chains, clamps, clips, hinges, push buttons, ropes, springs, switches, washers and buzzers—under CTH 8431.

According to the Department, these were general-purpose goods liable to be classified under their respective individual tariff headings, resulting in a demand of differential customs duty exceeding Rs. 1.24 crore, along with interest, confiscation, redemption fine and penalties.

The appellant contended that all the imported items were specifically manufactured for use in lifts and escalators, were unique in nature, and could be used only for their erection, installation and functioning. It also argued that parts specifically designed and essential for the operation of lifts and escalators were correctly classifiable only under CTH 8431.

Accepting this contention, the Tribunal observed that classification under CTH 8431 was appropriate where the goods were solely or principally meant for use with lifts and escalators, and that the department's attempt to reclassify them under residual or generic headings was unsustainable.

The Bench further noted:

“The Adjudicating Authority has acted outside his jurisdiction to the extent he has confirmed the demands even in respect of goods imported and assessed to duty at various places other than within his territorial jurisdiction.”

However, the Tribunal upheld the Department's case with respect to door locks, holding that they were not classifiable under CTH 8431 and were liable to be classified under a separate tariff heading.

Accordingly, the Tribunal set aside the customs duty demand, interest and penalties in respect of all other items, granting substantial relief to Johnson Lifts Pvt. Ltd.

For Appellant: Joseph Prabhakar

For Respondent: Anoop Singh